Engineers India FPO opens; should you subscribe?

BSE | NSE 01/01/70 Are Mutual Funds betting on ?

The follow-on public offer of state-run Engineers India (EIL) has opened for subscription. The price band for the 334 lakh shares issue, which closes on July 30, is at Rs 270-290 per share.

EIL is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management services, principally focused on the oil and gas and petrochemicals industries in India and internationally.

Experts have given thumb-ups to the follow-on public offer. Commenting on the issue, SP Tulsian of sptulsian.com said, "There is no any harm even at the higher end because I will be factoring in 5% discount which is given to the retail investors. This translates into a price of Rs 274.50. With an expected EPS of Rs 15, I don't think there should be any complaint for a fair valuation of Rs 300. Post FPO, you are unlikely to see the share price falling below Rs 300. So, retail investors can get the share even at upper end of Rs 290 which translates into a cost of Rs 274.50 for them. I think that is good price."

"It seems like the government has started taking pragmatic view to attract retail investors and not rely merely on the handful of their PSU institutional investors this time. If the same trend continues and if they are aggressive in taking a little discount on the current market price or purely on fundamentals, then things are looking good for the forthcoming PSUs. I don't think I have any complaint for the FPO at the price band of Rs 270-290," he added.